Severance / Redundancy Calculator
Calculate your Nigerian severance / redundancy pay
Uses the Labour Act base formula. Adjust for your contract terms and reason for exit.
Severance pay under the Nigerian Labour Act
The Nigerian Labour Act sets a minimum floor for severance in redundancy situations - typically 2 weeks of pay per completed year of service, though many contracts provide better terms. Dismissal for cause usually voids severance. Resignation generally means no severance unless your contract says otherwise. Mutual separation is a negotiated settlement - often close to redundancy terms.
Notice pay is separate: if you're terminated without notice, you're entitled to be paid your notice period (typically 1-3 months depending on seniority and contract). Some employers pay this on top of severance; others include it.
This is a first-pass estimate. Always review the exact wording in your contract and, for anything above NGN 5M, engage an employment lawyer before signing the release.
Frequently asked questions
Am I entitled to severance if I resign?
Usually no, unless your contract explicitly provides it. Some senior contracts include a "resignation with notice" severance clause - check yours.
Is severance taxed?
Yes - severance is subject to PAYE like regular pay in the month it's paid, which can push you into a higher tax band that month. Sometimes worth negotiating to spread payment across two tax years.